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PM vows to end country’s current economic morass

  • Says country will receive $2 billion from the International Monetary Fund (IMF)
Published June 29, 2022

ISLAMABAD: Prime Minister (PM) Shehbaz Sharif, Tuesday, while vowing to sail the country out of the economic crisis and bring economic stability in the next 14 months has said that Minister for Finance Miftah Ismail has informed him that the country will receive $2 billion from the International Monetary Fund (IMF).

The prime minister said this while addressing the Turnaround Pakistan Conference organised by the Ministry of Planning and Development.

The prime minister also stressed economic stability will require political stability. He said the government will have to rise above personal interests and take long-term decisions which change the destiny of the country.

He said that the country could not rely on the loans as “our ultimate goal is to achieve self-reliance as it only guarantees to independently take political and economic decisions”.

“Miftah Ismail relayed a message in the morning saying that we will hopefully be receiving not $1bn from the IMF, but $2bn. I replied by saying that our real goal is achieving self-reliance. Easier said than done,” the premier said.

The prime minister stressed the need for all quarters to work together for the country’s progress, as well as, the need for self-reliance. Self-reliance guarantees political and economic independence, he said.

IMF likely to indicate approval of agreement today

Talking about the recent opening of a mega development project in Bangladesh, PM Shehbaz said the PM of Bangladesh had proudly announced that they had completed $6 billion mega project without the help of international donors. “Surely, this is a big achievement,” he said, adding that Pakistan was not lacking in resources or expertise.

He cited the example of RekoDiq, saying Pakistan had wasted billions but had yet to earn anything from the project. Shehbaz said that Pakistan was drowning under debts, saying the country’s liabilities far outweighed its assets.

PM Shehbaz said the country was facing difficult challenges when the present government took over the matters but owing to collective utmost efforts to steer the country out of them now Pakistan has avoided default chances. He expressed satisfaction that a majority of the affluent class has accepted the super tax which will help generate Rs230billion in revenue. He assured that this money will not be spent on current expenditures but will be used for economic development. He said a policy will be framed very soon which will encompass these development schemes.

Regretting the delay in completion of various projects, as well as, the failure of the previous government to sign on spot or long-term agreement for the purchase of LNG, he said we are now importing coal from Afghanistan to address the issue of power outages. He said since this transaction will be in Pakistani rupee, this will help the country save two billion dollars. He said this coal is suitable for the power projects installed under the CPEC.

The prime minister asked participants of conference to give suggestions for uplifting the agriculture and agro-based industries and bolstering of exports besides that do away with obstacles in the way of businesses and investment. He said we want to end red tape and the culture of the NOCs within a month.

He regretted that the 1,200-megawatt Haveli Bahadur Shah Power Plant, set up by the former PML-N government, had still to be completed.

“If you look at the electricity we were supposed to get, which was supposed to run the agriculture sector, our industries, (and) give millions employment; when you take all of this into account, then we suffered a colossal loss.”

During his speech, the premier said that Pakistan had nothing to show after 75 years of independence. “But nothing will be achieved by crying over spilled milk,” he asserted.

He said that a few weeks ago, there was a danger of the country running out of edible oil, adding owing to the situation he wrote to Indonesian President Joko Widodo in this regard and also spoke to him on the phone. “The Indonesian president said he would issue instructions,” he said, adding that he directed a minister to go to the country at his own expense, where he stayed until the vessels departed for Pakistan. “This is one example. When you want to work then countless doors open.”

“New governments blame the previous governments. We need to decide on changing the country’s fate and for that, we need to work day and night. Unless this is done, we will keep moving in circles,” he said.

Speaking on the occasion, Finance Minister Miftah Ismail said that there is no danger of default after the difficult decisions taken by the government for the betterment of the economy.

Miftah Ismail said that the PM’s response to his message about the IMF was that remember, the country’s ultimate goal of self-reliance. The minister said that this is the first step in this direction and if for 10 years Pakistan leaves anything and move towards inclusive and sustainable growth this objective can be achieved.

The minister said that even in this difficult time, the prime minister has initiated a scheme for the poor against the increase in petroleum prices and invited a large number of families over six million to benefit from it. Four million people have contacted us and one million people have been registered. Under the scheme, these families will get Rs2,000 for the entire next year.

The finance minister said that when the coalition government came to power after voting out the former prime minister, the country was facing a huge budget deficit and this was projected at Rs5 trillion in the ongoing fiscal year.

Govt may take more harsh decisions to improve economy: PM Shehbaz

The minister maintained that the government decision obviously difficult ones have placed the country on its feet and now there is no danger of default. He came hard on the previous government and stated that its decision to provide Rs120 subsidy on petrol and diesel had no economic rationale as it was propelling the country towards bankruptcy had the government not increased the price of petrol and diesel. He also thanked the poor for understanding the government’s problem and supporting it in taking difficult decisions.

He said that the government made effort to bring the rich people into the tax net as the government has taxed the prime minister’s sons and his own (finance minister)’s company. He said that the supertax was imposed from four percent to 10 percent and also bringing retailers into the tax net.

The minister also announced to bring builders, real estate agents, car dealers, furniture makers into the tax net, adding that the situation is very tough and if needed, more difficult decisions would be taken.

Miftah said that the withdrawn taxes on seeds, solar panels, and pharmaceutical refunds have been expedited as priority and the government preferred the economy over political interest and that is why it has taken politically -challenging decisions.

Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal said the aim was to take input, understand and resolve hurdles in economic growth in order to place the country’s economy back on track. He said that the government was aiming to bring Pakistan among the top 25 global economies.

He said the solutions of the conference would be aimed at short-term results, adding that if substantial, these due deliverance compact ideas could be extended on to mid- and long-term objectives.

He said the government had already taken necessary short-term actions to stabilize the economy and deal with the looming balance of payments crisis.

However, he said, the government’s focus is to ferret out the medium to long-term solutions to optimise the country’s economy to tap its full potential in line with Vision 2025.

The conference was attended by representatives of political parties, federal ministries, provincial governments, national and international private sector entrepreneurs, international development and financial institutions, academia, think tanks, independent experts, NGOs, and the civil society.

Copyright Business Recorder, 2022


Comments are closed.

Dabeer Razvi Jun 29, 2022 11:59am
Good to hear all this. However, promote local industry , such as making Solar Panels rather than giving massive relief to Favorites'. Go for long term Policies. Cut down Govt Expense, Non Productive departments to be done away with. If we spend more than what we earn, it's a recipe for disaster. CNIC Condition for non filers waived by the present Govt should be re-introduced as this promotes Black Economy. Corruption is Bad . Should be ruthlessly eliminated. Strengthen all State Institution and they should produce results as enshrined in the Constitution of the Country.
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